Miami to Havana cruise business will take years to develop

U.S. cruise companies are eager to add Cuba to their itineraries; but even if U.S. policy allowed that, Cuba’s ports would need years of rebuilding to accommodate the ships, industry officials said on Wednesday.

“Our business has grown so much that these ports in Cuba that were (established) in the time of the Spanish conquistadors, that size of ports, they’re going to need a lot of infrastructure improvement,” John Tercek, vice president of commercial development for Miami-based Royal Caribbean Cruises Ltd, said at an industry conference in Miami.

The world’s three largest cruise companies—Carnival Corp & Plc, Royal Caribbean and Norwegian Cruise Line, which is owned by U.S. private equity firms Apollo Management LP and TPG Capital LP and by Genting Hong Kong Ltd—are all headquartered in Miami.

They are prohibited by the United States from doing business with nearby communist Cuba, under a policy aimed at depriving Cuba of U.S. dollars until it adopts democracy.

The Caribbean region is the top destination for cruise lines because of its year-round mild weather and its proximity to North America, which is the source of more than 70 percent of all cruise passengers globally.

The cruise industry in turn pumped $2.27 billion into the economies of 29 Caribbean destinations last year, according to the Florida-Caribbean Cruise Association.

When industry officials gather each year at the Cruise Shipping Miami conference, the conversation inevitably turns to when U.S.-Cuba relations might thaw enough for U.S.-operated ships to call on Cuban ports.

“The moment Cuba comes into the market, I think it’s another star,” said St. Lucia Tourism Minister Allen Chastanet.

Because Cuba would be a novelty to most American passengers, it could draw traffic away from other Caribbean ports, industry officials said. But they said it would be likely that the attention focused on a newly opened Cuba would generate more interest in the Caribbean overall, creating a bigger tourism pie for all to share.

“When Cuba opens up, it’s going to be great for everybody,” Royal Caribbean’s Tercek said. “We’ll all find interesting ways to grow with it.”

But no one expects overnight changes.

“The general assumption—that if the U.S. administration dropped their restrictions, there’s going to be a mass exodus of all the ships to Cuba—is clearly not going to happen,” said Colin Murphy, vice president for destination and strategic development for Norwegian Cruise Line.

“No one knows what the government of Cuba will do. So if there’s a change in policy from the U.S. administration, it doesn’t mean we’re necessarily going to be welcomed with open arms there.”

If U.S.-Cuba relations thawed, the first U.S. cruise ships to call on Cuba would likely be the smaller ones, cruise officials said. It could take four or five years to refit Cuba’s ports to accommodate the 150,000-plus-ton megaships that now ply the Caribbean waters and carry thousands of passengers, they said.